Country Profile

Azerbaijan’s oil springs were first mentioned by Marco Polo in the thirteenth century. Describing the abundance of this substance which oozed from the ground he noted that it was not to be used for cooking, but was ‘good to burn’. It is this oil that has recently attracted international companies to invest huge amounts of Western money (to date about $2.5 billion) in this Caucasian country on the western shore of the Caspian Sea.

This is not the first time that the country has attracted oil entrepreneurs. By the late nineteenth century the Rockefellers, Rothschilds and Nobles had all made fortunes here. Their grand, European-style mansions can be found in the cobbled, vine-laden avenues of the old town in the capital, Baku, where the elegant rooms are witness to a style of life long gone.

Today’s boom is prompting a similar spending spree. Over the last decade new mansions have sprung up and the paraphernalia of new wealth at the end of the twentieth century abounds: satellite dishes, luxury cars, mobile phones. The new wealth and visitors no longer compete for tables at the traditional caravanserai eating in small alcoves around a medieval courtyard; instead they are attracted to trendy Western-style restaurants.

Azerbaijan was incorporated into the Russian Empire in the early nineteenth century. Briefly independent from 1918, it was invaded again in 1920 and became the Soviet republic of Transcaucasia. In 1992, following the break-up of the Soviet Union and in the euphoria of new democracy, former communist leader Heydar Aliev was replaced by the pro-Turk Abulsaz Elchibey, who attempted to lead the country towards closer connections with the West. Soaring inflation and war with Armenia over Nagorno-Karabagh swiftly led to disillusion. By 1993 Aliev was again in power and guiding the country back into a close relationship with Russia.

President Aliev – former general in the KGB and Politburo member, now converted to capitalism – has proved to be a wily negotiator. He is widely believed to have sided with the Armenians and the Russians to force Azerbaijan to return to Moscow’s sphere of influence. In the presidential election of October 1998, Aliev won 76.1 per cent of the vote. The election has been described as ‘a sham’ by international monitors but was marginally more realistic than the 98.6 per cent support that he had claimed in 1993.

But the loud signs of wealth in Baku are a veneer; it stretches no further than the city limits. Oil companies have driven a hard bargain. They have insisted that they recover their investment first so it will be at least ten years before the broader population benefits. The current concentration of wealth in the hands of a small élite is leading to growing discontent. Opposition criticism during the election campaign of the regime’s corruption and incompetence has also had a lasting impact.

The war with Armenia remains unresolved since the ceasefire of 1994. Azerbaijan has effectively lost not only Nagorno (‘mountainous’) Karabagh but the Valley of Karabagh too. The country carries a huge price from this war in that one in seven of its population is a refugee – the highest per-capita refugee population in the world. Aliev supports a negotiated settlement for Nagorno-Karabagh; this may be logical but it is not popular.

Despite his recent electoral victory, Aliev’s power is no longer secure. The golden age that oil promised to bring has not materialized. Defeated at war, carrying a huge refugee burden, dissent burgeoning: this is a country more than ready for a change.

ECONOMY: GNP per capita $480 (Russia $2,410, Japan $40,940). Principally dependent on oil. Outside investment is attracted by tax breaks. The majority of the population remains agricultural, cultivating citrus fruits, grapes and cotton with some tobacco. Soaring transport costs restrict exports to Russia: almost all (including cotton fibre, cement and plastics) go to Europe and the Middle East. The IMF figure of 9% economic growth in 1998 is widely disbelieved.

PEOPLE: 7.7 million. There are an estimated one million refugees from the war with Armenia.

HEALTH: Infant mortality 34 per 1,000 live births (Russia 20, Canada 6). Half the population does not have sewerage facilities while only a quarter of all water is treated.

ENVIRONMENT: There is extensive soil pollution from pesticides, particularly from the highly toxic defoliants used on cotton crops.

CULTURE: Turkic Azeris 83%; Russians 6%; Armenians 6%. Other minorities include Georgians, and Kurds ‘ethnically cleansed’ by the Armenians in 1992-93.Religion: Shi’ite Islam.Language: Azeri is the official language but Russian is still widely used, especially in Baku.

SourcesWorld Guide 1999-2000; The State of the World’s Children 1999; Europe Review 1998; thanks to Thomas Goltz and Laurent Ruseckaas.

Never previously profiled

STAR RATINGS

INCOME DISTRIBUTION
Investment is limited to the oil industry. Wealth remains in the hands of a small élite in the capital.

LITERACY
The level of literacy is high thanks to the inherited Soviet education system. All children go to school until 16.

SELF-RELIANCE
Potential oil and gas wealth makes Azerbaijan a country of importance as well as giving it a significant bargaining tool when dealing with Russia.

FREEDOM
Democracy is limited but the opposition was allowed to lambast Aliev on state television during the election.

POSITION OF WOMEN
In Baku middle-class young women are finding work with foreign companies but rural areas are deeply traditional.

LIFE EXPECTANCY
71 years. Compares with neighbouring Iran's 69 years and a world high of Japan's 80 years.

POLITICS

NI ASSESSMENT
Even without election fraud Azerbaijan commentators believe Aliev would have received the majority vote but criticism is mounting. Aliev's attempts to put his own family in positions of power and influence (his son Sokar is head of the State Oil Company) are resented. Genuine democracy may slowly emerge over the next decade.

New Internationalist reports on issues of world poverty and inequality. We focus attention on the unjust relationship between the powerful and the powerless worldwide in the fight for global justice. More about our work